Comments on: Great Entrepreneurs Suck At Investing

By: Alex

Alex — Tue, 14 Jun 2011 00:46:46 +0000

Perhaps entrepreneurs and investors do have more similarities. I feel the post makes some good points, but:

- Regarding optimism: why should an investor not be optimistic? Fine, the market is not always going up, but as an investor I believe that when a decision is thought over and then made, and investor should be optimistic about his decision.

- Convicted in the decision: also entrepreneurs make errors. Often, entrepreneurs will have to admit they are wrong… perhaps not to their personnel, but to themselves.

- Aggressive: Yes, big entrepreneurs made big bets in their lives, but so did great investors. But then again, how do you define a ‘bet’. Even the biggest bet are calculated risk/reward decisions.

- Never give up: Entrepreneurs indeed never give up their cause… but sometimes they have to admit that a certain approach or idea is not working, and they switch to something else. Investors will also not give up they portfolio or methodology, but they also have to admit from time to time that a certain investment is not doing well, or that their strategy is not working at this time, and they have to re-balance their portfolios.

I think, entrepreneurs and investors are not all that different. Entrepreneurs invest in their own company, investors invest in other companies.

By: Jerry

Jerry — Sat, 19 Mar 2011 21:52:14 +0000

That is so true. My very good friend is extremely successful. A millionaire many times over and does not do well with his money. He needs to invest wisely as insurance for his future but I think he just thinks that he’ll always be able to make money. One misstep could lead to devastation so I hope he changes his ways.

By: Dave

Dave — Mon, 07 Mar 2011 03:47:19 +0000

I’m an entrepreneur and this article nailed it. I stick with loser stocks way to long. I get hyped up and take excessive risk on little companies that have very small chances of success. On the other hand, I guided my own company through dark days by sticking with it and never giving up.

I guess you need to do what I advise my clients, concentrate on the things you are good at and let experts handle the rest.

By: Eric

Eric — Sat, 15 May 2010 11:23:11 +0000

I will respectfully disagree with your point that having conviction in an investing decision is a bad thing. I believe that this is not always the case. If I do a thorough analysis of the financial statements, study the annual reports, do the due diligence, value the company, and find that it is trading at a steep discount, then I believe that conviction can help. It is especially helpful to have conviction if the price fluctuates a lot or the market is going through a tumultuous period.

However I do agree that too much confidence and optimism is a bad thing for novice investors who think that they know more than they do.

By: Ken Reid | Stocks Online Learning

Ken Reid | Stocks Online Learning — Wed, 05 May 2010 23:29:10 +0000

A lot of investors are “mature” entrepreneurs. They’ve made their money, now they are looking for ways to use it

By: Steve C |MyWifeQuitHerJob.com

Steve C |MyWifeQuitHerJob.com — Fri, 14 Nov 2008 00:32:29 +0000

I have to disagree about the two being mutually exclusive, though you are right on the money that investing requires a completely different mindset. Many good investors that I know personally are always aggressive, but they are aggressive on both sides of the coin. Great thought provoking post.

By: jakewriter

jakewriter — Tue, 15 Apr 2008 10:02:58 +0000

I believe you’re right though some entrepreneurs like Warren Buffet have done pretty well at investing….great tip for my bor…gota pass it on.

By: LiteDeals

LiteDeals — Tue, 08 Apr 2008 20:10:45 +0000

Insightful article. I have tried both and felt that these two are not very compatible but this article summarized the difference right to the point. Of course, the investor here is refering to “passive” investor while entrepreneurs are “major active” investor

By: Natasha

Natasha — Mon, 07 Apr 2008 09:12:08 +0000

Interesting reading, perhaps the prudence of an investor can still be applicable when working with the optimistic entreprenure. It can help take an enterprise in a different direction.
I am your typical entreprenure (as you have described above), but I am now working with a very non-aggressive, reserved and prudent person. It has been an interesting experience as she has ideas and direction that I would not have.
Surprisingly, this dynamic is working very well. I come up with ideas and impliment them, whereas she tends to maintain these business ideas and keeps them profitable and stable.

By: AJC @ 7million7years

AJC @ 7million7years — Sun, 06 Apr 2008 04:55:52 +0000

Great post but prefer if you insert the word ‘usually’ before ‘entrepreneur’ … I’m a pretty good Entrepreneur/Investor (2/3 : 1/3), but they don’t call me the Scared Millionaire for nothing: